Is Cara Therapeutics Inc. (NASDAQ:CARA) A Falling Knife?


Shares of Cara Therapeutics, Inc. (NASDAQ:CARA) are currently poised at 1.05% from the open today and are hovering around at $27.15. More than 1,433,399 shares have traded hands versus an average trading volume of 2.10M. At the current PPS, the market capiralization stands at $810.32M. The stock prices of Cara Therapeutics, Inc. (NASDAQ:CARA) are currently trading at 5.92% below its 52 week high and 524.21% above its 52 week low.

Cara Therapeutics, Inc. (NASDAQ:CARA) is all set to post its earnings on Aug 03/a. As per Zack’s analyst ratings, Cara Therapeutics, Inc. (NASDAQ:CARA) has an average brokerage rating of . On a scale of 1-5, a rating of 1 or 2 would show a buy, and a score of 4 or 5 would indicate a sell call. A rating of 3 would suggest a hold on the stock.

Let’s take a look at the technical analysis.

The Barchart Technical Opinion rating is a 100% Buy and ranks in the Top 1% of all short term signal directions. Longer term, the trend strength is in the Top 1%. Long term indicators fully support a continuation of the trend. The market is in highly overbought territory. Beware of a trend reversal.

The Exponential Moving Average is similar to a simple moving average however it utilizes a weighting cog that exponentially drops from the recent data point. The study of EMA compares the short term, intermediate term and long term EMAs. The respective EMAs tend to give bullish signals when hovering above trailing EMAs and below the latest price and vice versa. EMA alerts constitute crossovers i.e. the 5-day EMA crosses below/above the 20 day EMA and EMA convergences 5-day EMA comparable to 13 day EMA. The long term and short term EMA’s of 21.82 and 17.57 are lower than the current trading price suggesting a bullish pattern in both short term as well as long term.

The relative strength index (RSI) can be defined as a momentum oscillator that can compute measure the velocity and extent of stock price changes. Momentum is computed as the ratio of positive price variations to negative price changes. The RSI study compares the current Relative Strength Index against oversold (30), overbought (70) and neutral (50) conditions. Alerts will apprise you when shares recede from oversold/overbought marks or breakthrough neutral (50). The current RSI is 84.37 suggesting a bullish price action.

Though Cara Therapeutics, Inc. (NASDAQ:CARA) represents an exciting growth story open to numerous attractive markets, it would be remarkable to see how it does for long-term investors.